I have a 1971 Ve beetle that reads only half full when I fill up the tank. To date to remedy this I have done the following. Fitted a brand new gauge, tank sender and voltage stabiliser. All these new parts and still same issue. I have also placed an additional earth wire from the back of the speedo assembly in the event it was a bad earth. No change. I then tried a different power source to the stabiliser. No change. I ran a new wire from tank sender to rear of gauge. Again no change. I'm out of ideas if anyone can help.
Try putting an earth from the chassis/body to the sender unit. Dave
Mine did the same thing. I fixed it by removing the sender and bending the arm of it down a bit. That way the lower fuel level pushes the arm up earlier, if that makes any sense. I wouldn't worry what it reads when full, just know what it reads when near empty.
When replacing the sender unit you have to adjust the arm and the two stops.
thanks gents Ill try the earth option first and then maybe the sender one afer that. cheers
You need to check what the readings should be for your fuel gauge when full and also when empty. Take out the fuel sender and with your ohmmeter,
adjust (bend) the arms until you get the correct readings to match the factory settings. Put the sender back in and you should be fine. Do check the
earth first though.
Yogie
71 VW's I have seen don't have a float arm-its a float inside an ally tube.I had one apart recently and it looks like nothing can be altered.The VW fuel gauges operate between 10 and 73 ohms.You need to select a sender that operates between those numbers.
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For the OP....
The senders have a resistive strip, and as the float goes up and down there is a metal tab that rubs on that strip. When the float is all the way down
then putting a multimeter between earth (body of the sender unit) and the output lead it should read about 10Ohms, and when you move the float up it
should read about 73Ohms (10-73 as Greg said). Don't be too worried if it reads 4-84 or something, it will still function OK on the gauge.
Oh, and I once had this gauge that did that on a customers car, and I found the needle was just slightly touching the glass and catching. 
How does it read when low in fuel that's more important you don't want to run out
Check this out